The Mortgage Source

5 Secrets of Successful Savers

2011-03-03T10:00:00.000-07:00

One of the most common questions is how someone can begin building financial security, especially when they're still paying off loans or other types of debt. Check out these five secrets - they are all strategies that anyone can begin implementing today.

1) Start slowly. Start by saving just a small amount this can get you on the path towards bigger savings. If you cannot afford to put away a big chunk of your salary than try to put away 2 percent. Then increase it as you move from year to year until you reach your goal.

2) Read about financial and economic news. A survey by HSBC Direct found that people they call "active savers," tend to pay attention to financial news. That might help them maintain a general awareness and savviness about money, and also teach them about basic principles such the importance of not trying to time the market, and finding accounts that don't charge hefty fees.

3) Save regularly through automated systems. Online banking makes this technique easy: Sign up for monthly transfers into a brokerage or savings account. You can also transfer funds directly from your pay so you never even see the money, which means you won't miss it. Check in with your human resources department--you might be able to set up an automatic savings account through your pay in addition to your automatic retirement savings.

4) Find saving pleasurable. This trait might sound counter-intuitive: How can anyone enjoy saving money, since doing so essentially prevents the pleasure of a purchase today? But some people--especially successful savers--naturally feel more pleasure while socking money away rather than spending it, since they know they are building financial security, and they can spend it one day in the future. If you don't naturally feel this way about saving, you can teach yourself to, by focusing on how much financial security means to you each time you add to your savings accounts.

5) Began saving as a child. The HSBC survey found that most active savers had been saving money since they were little and they learned the value of saving from their parents. While adults today who didn't receive those lessons can't change their past, they can help pass on better lessons to their own children by talking about finances and family budgeting often. Doing so would put them in the minority: A Charles Schwab survey found that only one in five parents frequently talk to their teens about family budgeting and spending decisions, and just over half of parents teach their teens how to save regularly.

One trick that combines these strategies is to encourage elaborate family discussions about what you will do with all the money you are saving. For example, if your savings goal is to take a family vacation to Belize, children can draw pictures of the rain forest, parents can crunch some numbers, and soon you'll be snorkeling in the coral reefs. (Source:Yahoo Finance)

What Does Your Retirement Look Like

2011-02-24T10:00:00.003-07:00

Have you ever wondered what you need for retirement? There are some very interesting things to consider. Read on to see how your lifestyle and expenses determine how much money is needed in retirement.

Your current lifestyle may impact your retirement more than you think.

Can it be sustained? How much money will it take to maintain the standards you're used to? What will it take in RRSPs, investments, savings and private and government pensions once retired?

"Understand how much it costs to keep the lifestyle that you are enjoying today and lock it in," says Patricia Lovett-Reid, senior vice-president of TD Waterhouse.

That sounds like a simple plan, but Lovett-Reid says many she talks to register a little shock when they hear that it could take $1 million to enjoy retirement as much as their working days.

Much of what's needed is driven by what people intend to do once they retire, says Lovett-Reid, who writes and speaks about personal finance. Planning should take into account the expenses they anticipate will result from their spending choices once their working days are over.

Portfolio manager Adrian Mastracci says most retired couples can live on $50,000 to $60,000 gross total income from various sources per year. It can be done on less, but might not be "pleasant," he says.

Mastracci says Canadians may not be saving enough for retirement, but he notes the economic climate as well as costs like housing and children that tend to eat up paycheques.

"I think we're a little too hard on a lot of investors," said Mastracci, of KCM Wealth Management Inc. in Vancouver.

Mastracci says he doesn't believe most will need the equivalent of 60 per cent to 70 per cent of their working salaries in retirement. "What I buy into are the expenses you have. Chances are the expenses before retirement and after retirement aren't going to change very much, if any. Can you live on whatever that tells you?"

Lovett-Reid says 50 per cent of pre-retirement income is enough to lead a "modest" lifestyle in retirement. But she likes to use the 70 per cent rule. If the gross salary for the average couple is $63,900 at age 65, that couple would need to generate 70 per cent of that yearly in retirement.

For those going into retirement with consumer debt and mortgages, they're going to have to get "creative," said Gail Vaz-Oxlade, longtime financial writer and TV host.

That could mean getting a roommate, being a companion to an elderly person who doesn't get out much, working at a part-time job or selling your house to get out of debt, she said.

"Unfortunately, there have been people who have gone into retirement thinking they can behave as if they're still working," said Vaz-Oxlade, whose latest book "Never Too Late'' offers advice for retirement planning to those who are unsure of how to get started.

As the March 1 deadline to make an RRSP contribution looms, Canadians will hear numerous cheerful advertisements from financial institutions about making their contributions so they can retire in style. But whatever vehicle you choose to invest in for the future, in the end it will need to produce enough to match your expectations, and that's what you should be thinking about right now.

"We were sold retirement as being the day you stop working and climb on a sailboat and head out into the Caribbean. But that's not what retirement is for 85 per cent of us," said Vaz-Oxlade. "If you want to travel the world every year, you had better be socking away a ton of money." (Canadian Press)

Fixed Rates Going Up

2011-02-07T13:31:00.002-07:00

Fixed rates going up tomorrow, call today to get your pre-approval!

Harper Government says Economic Projections on Track

2011-02-04T22:00:00.001-07:00

Good news coming from The Honourable Jim Flaherty, Minister of Finance. He met with Canada’s leading private sector economists to gather their views on economic prospects for the country. The economists confirmed the Government’s economic planning assumptions remain on track.

“Our top priority continues to be the economy,” said Minister Flaherty. “With the economic recovery still fragile, we must remain focused on creating jobs and economic growth, while balancing the budget in the medium term.”

Since Budget 1994, the Department of Finance has used the average of private sector economic forecasts as the basis for fiscal planning. In producing its forecast for budget planning, the Department surveys private sector forecasters for their views on the main economic variables, such as gross domestic product, the unemployment rate and interest rates.

“Our Economic Action Plan has proven to be a dynamic, ambitious and successful strategy in response to an unprecedented global crisis,” said Minister Flaherty. “While the first phase of our Government’s extraordinary response is nearing its end, our Economic Action Plan will continue to play an enormous role in reaching the economic potential of this country and increasing the living standards of Canadians well into the future.”

The Department surveyed 15 leading private sector forecasters in December 2010. Overall, the economic outlook is broadly consistent and on track with the September survey published in the Update of Economic and Fiscal Projections.

The economists agreed that the average economic forecast from the survey was a reasonable planning base for the continuation of Canada’s Economic Action Plan. Budget 2011 will include an updated fiscal forecast, reflecting revisions from private sector forecasters and other fiscal and economic developments.

“After having achieved so much, we must continue to focus on economic growth and stay on course to create more jobs, an even stronger economy, and an even higher quality of life for Canadian families. By continuing to implement our job-creating, low-tax plan we are withstanding whatever global economic winds bring our way,” said Minister Flaherty. “Our medium-range goal of a balanced budget is an achievable one, supported not by overly optimistic forecasts but by the prudence we have shown in the past and the discipline and values we share with Canadian families that are leading Canada forward.” (source: Verico)

What is Affecting Your Credit Score?

2011-02-03T19:10:00.000-07:00

There are five different categories that go into a credit score. 1. On-time record of payment.
2. Number of inquiries or applications for credit.
3. Your utilization of credit is also a major factor — that’s your balance divided by available credit. It’s not based on whether you have a balance at the end of the month but it’s the balance outstanding at a given moment divided by your available credit.
4. Longer term credit history.
5. The broadness of your credit - somebody who has just one credit card doesn’t look as strong as someone who also has a line of credit and say a mortgage.

Click here to read more about what is affecting your credit score. (Garry Marr, Financial Post)

Western Provinces are Holding Strong

2011-01-31T09:19:00.000-07:00

Alberta, B.C. and Saskatchewan have seen the strongest net inflow of people of all provinces for the past three years and that will not change in the short term, the TD report forecasts. The three jurisdictions are working to implement a newly signed trade and labour mobility agreement between them that could eventually see seamless movement of workers between their borders.

It is back - Win, Win, Win with our Referral Program!

2011-01-23T11:24:00.000-07:00

This is a program where everyone wins and you get to share the value of our services with the people you care about....here's how:

Click here to contact us today!

Good News

2011-01-18T18:33:00.000-07:00

After the news yesterday from Jim Flaherty, we got some positive news about rates. Bank of Canada rate will remain at 1.00% and Prime rate will remain at 3.00%.

Tighter Mortgage Rules

2011-01-18T11:28:00.000-07:00

Federal Finance Minister Jim Flaherty announced changes to mortgage insurance rules intended to ensure the stability of Canada's housing market.

These measures include:
• Amortization period capped at 30 years - effective March 18, 2011
• Reduction of government backing for home equity lines of credit - effective April 18, 2011
• Maximum refinancing reduced to 85% from 90% Loan to Value - effective March 18, 2011
There are no changes to down payment requirements – still at 5% down. Flex Down payments are still available using cashbacks or borrowed down payments.

We will continue to update members on any new developments.

Please feel free to call us, should you have any further questions or concerns.

Three Last-Minute RRSP Tips

2011-01-13T10:00:00.000-07:00

Time is running out to make your RRSP contribution and take advantage of a tax deduction for 2010.

With the March 1, 2011 deadline fast approaching, here are three last-minute tips to consider:
1. Find an advisor
Chasing returns or the next big thing can only lead to disappointment. Guidance from an experienced investment advisor will take emotion out of the mix and help you meet your financial goals.
2. Contribute now
Don’t worry about how to invest your RRSP contribution. Temporarily park your contribution in a money market fund today and rebalance your portfolio tomorrow.
3. Diversify, diversify, diversify
Canada’s equity market represents only about five per cent of the world’s entire stock market. It makes sense to diversify your portfolio and invest in global markets. Consider different asset classes too to limit risk. (Source: News Canada)

Budgeting for Interest Rate Hikes

2011-01-10T10:51:00.000-07:00

Interest rates, near historic lows for much of the past two years, are widely expected to increase through the latter half of 2011. The cost of carrying debt, including mortgages, lines of credit and credit cards, will be affected.

“Low interest rates have enticed many Canadians to spend more on credit,” says Stephen Reichenfeld, VP and wealth counselor, Fiduciary Trust Company of Canada. “But an improving economy means lending rates will likely rise. It’s important to take steps today and prepare for potential higher borrowing costs in the years to come.”

Four steps that can help you prepare to come out ahead:

• Reduce personal debt. Do what you can today to decrease your debt load before borrowing costs increase. Review the option to lock in borrowing costs now and consolidate debt at a lower interest rate. If you’re only making minimum payments on your credit cards, start paying more.
• Rethink your mortgage. If you have an adjustable rate mortgage, and you plan to be in your home for at least five years, consider refinancing options such as converting to a fixed rate mortgage at current rates. Speak to your mortgage broker to discuss your options.
• Equity funds. Stocks tend to benefit more than fixed income products like bonds in a rising interest environment. Past market cycles indicates sectors like industrials and technology benefit when interest rates rise.
• Don’t hesitate on a major purchase. Consider accelerating your plans to purchase now before interest rates rise. If you’re in the market for a new car, there may be zero percent financing and other incentives available. These offers often disappear as rates rise. (Source: News Canada)

New Year's Resolutions for Entrepreneurs

2011-01-07T08:37:00.000-07:00

Want to raise your game in 2011? Here's advice to get started now.
By Kara Ohngren | December 30, 2010, the experts at Entrepreneur.com suggest the following new year's resolutions for business owners.

Productivity
It's critical to get absorbed in your business niche to achieve mastery. But, most importantly, laugh, love and live more fully. -- Scott Halford, Brainy Business
Video Marketing
Create at least one professionally-produced video for the homepage of your website and social media sites. It should show why your business is the best choice among the competition and include a compelling incentive to make an immediate purchase and share the video with others. -- John Arnold, Marketing Tools & Technologies
Growing
Turn your small mom-and-pop business into a bigger opportunity this year by launching the projects you never got around to in 2010. -- Lisa Druxman,Mompreneur
Prioritizing
Ask yourself, “What can I stop doing?” Begin to put stronger accountability practices into place to create a better business foundation. -- Nina Kaufman, Making It Legal
Mobile Marketing
Make mobile marketing a high priority. Capture mobile shoppers by updating your website to load quickly in a variety of browsers and making them Facebook and Twitter interactive. Offer competitive pricing and tap into the soaring popularity of coupons by texting them to your customers' mobile phones. -- Kim T. Gordon, Marketing

Happy New Year – make 2011 your best year ever!!

How to “insure” a safe holiday season

2010-12-16T09:37:00.000-07:00

Yes, the holiday season is a time to be jolly, but it's also a time to be very, very busy. There's baking, decorating, party hosting and hopping, shopping, and much more.

Does your holiday planning include a checklist of precautions you should take to “insure” the season is safe and sound for you and your loved ones?

“With so much on the go, it's easy to lose sight of some of the dangers that can crop up during the holiday season,” said Wayne Ross, insurance expert at Aviva Canada. “Here are some important reminders of things that can go wrong and suggestions to prevent this from happening.”

• Oh Christmas Tree: Remember, a wet tree is a safe tree. Water your tree regularly throughout the holiday season and under no circumstances, leave a lit tree unattended.

• Be the Host with the Most: Monitor your guests' alcohol intake and if you feel someone has had too much to drink, don't let them get behind the wheel of a car. Take their keys away, offer them a spare bedroom, find a designated driver, or call them a cab.

• Be a Good Neighbour: Keep your sidewalk and walkway free of ice and snow. The last thing you want is to have a guest – or neighbour – falling and injuring themselves due to your negligence.

• Check Weather and Travel Conditions: Find out what's in store weather-wise and if the forecast doesn't look promising, allow yourself extra time or, better yet, wait until conditions improve.

By following the above advice, you can be assured that your holiday memories are happier than ever. More information is available from your insurance broker or online at avivacanada.com.

www.newscanada.com

Bank of Canada keeps key rate on hold

2010-12-07T15:19:00.000-07:00

Canadian economy has turned out to be weaker than expected, as a combination of weak productivity and a robust Canadian currency turn trade into a "significant drag" on growth.
The good news is that The Bank of Canada has said today that it has opted to keep its benchmark rate unchanged at one percent in spite of the risk in increase in global recovery. (source: Calgary Herald)

Good News!!!

2010-11-28T14:53:00.000-07:00

Good news for the Bank of Canada rate. Mark Carney is unlikely to start hiking the Bank of Canada rates until at least next July.

Market Update for the Red Deer Area

2010-11-12T13:24:00.000-07:00

We were invited to a Genworth / ATB breakfast on Wednesday morning and was given some very interesting market updates that we thought we would share with you.

1)Unemployed in Red Deer dropped from 8% to 6% from May to September of this year. This is a great boost to our economy!
2)Posted bank rate in May 2009 was 5.25%. Today it is 5.29%.
3)67% of Genworth approvals in the Red Deer area are between the ages of 18 – 35!

We found this to be a very important statistic as we move forward into 2011.

Buyers market? Some first-timers agree says RBC poll

2010-11-09T15:09:00.002-07:00

Almost half of first-time homeowners in Canada say it’s now a buyers market, pointing to a pick up in activity in coming months, according to an online survey conducted by RBC.
About 46 per cent of buyers who purchased a home in the past two years say it’s a buyers market, while 43 per cent of those who intend to buy for the first time said the same.
“That could be an indicator that there is higher home buying activity to come and rates do remain near historical lows,” said Marcia Moffat, RBC vice president of home equity financing Canadian banking, RBC
The property market, which bounced back to record levels in the first half of the year on the back of record low interest rates, has cooled off sharply in recent months. A combination of rising interest rates, the harmonized sales tax in British Columbia and Ontario, and new mortgage regulations all helped take some steam out of the market.
RBC expects prices to rise about eightper cent this year, with gains coming mainly from the first half, before slowing to about 1.4 per cent next year, Chief Economist Craig Wright said.
The RBC poll found 85 per cent of first-time buyers considered buying a home a long-term purchase with only 15 per cent planning to sell in the next two years. As well, 93 per cent plan to buy for their own use and not for investment purposes.
“Most first-time buyers are not planning to buy and flip, that’s good news,” Moffatt said, adding it indicated there was little speculation in the market.
When it comes to financing choices, the research showed the first-time buyer opted for certainty with 59 per cent choosing a fixed rate mortgage. Of those planning to buy in the next two years that figure came down to 49 per cent.
A combination of the two mortgage options, part-fixed rate and part variable, is gaining popularity with 31 per cent of future buyers saying that would be their choice, compared with just seven per cent of those who bought in the past two years.
Source:brokernews.ca

Interest Rate Hikes on Hold

2010-10-19T20:07:00.000-06:00

Good news for rates - Interest rate hikes are on hold until at least the spring and maybe as long as late 2011. The Bank of Canada decided today to keep its policy at 1%.

Construction Mortgages

2010-10-14T07:52:00.000-06:00

Home Buyers who are interested in purchasing a new home through a reputable builder have the advantage of no repairs and maintenance for many years to come. There are two types of Construction mortgage – a Draw Mortgage and a Completion Mortgage.

A “Draw” mortgage means that a portion of the total mortgage amount is advanced to the builder at certain stages of construction. These fund advances are regulated by the lender and is based on strict guidelines set and defined in advance. There are interested charges associated with obtaining a draw mortgage during the construction period and most builders are reimbursing this money back to the home owner.

A “Completion” mortgage means that the full mortgage amount is advanced to the builder upon possession date. There are no interest charges during the construction period to the home owner for this type of mortgage. However, the builder often is usually able to offer a price when using a draw mortgage. We pride ourselves in the volume of business we have done in the construction industry and can help you through the process to make your new built home a stress free mortgage.

Canada’s Banking System is the Soundest in the World

2010-09-12T10:21:00.001-06:00

The World Economic Forum’s 2010-11 Competitiveness Report ranked Canada’s banking system as the soundest in the world for the third consecutive year.

Bank of Canada Increased Interest Rate

2010-09-08T10:15:00.000-06:00

The Bank of Canada increased their rate ¼% today. This brings the overnight rate to one percent. They are expecting this rate to stay for at least a year. Prime rate is expected to go up ¼% on Monday.

Help is Available for Flood Victims in Alberta for Their Mortgage Payment

2010-08-27T10:00:00.000-06:00

Recent floods in Alberta and Saskatchewan, as well as forest fires in British Columbia, remind us of the hardships caused by natural disasters. Canadians may find themselves in financial difficulty due to circumstances such as temporary unemployment or the burden of rebuilding their home.

Should you find yourself in this unfortunate situation and unable to make your mortgage payments, Canada Mortgage and Housing Corporation (CMHC) wishes to remind Canadians that there are options available to you.

First, it’s important to take quick action and contact your lender at the first sign of any financial difficulty. Ask your lender about the options available to you and keep them informed of your situation. For CMHC-insured mortgages, CMHC provides lenders with the tools and the flexibility they need to achieve a solution to your unique financial situation. Depending on your circumstances, this might include:

•Temporary short-term payment deferral. Your lender may be prepared to offer greater payment flexibilities by allowing you to defer up to four monthly mortgage payments;
•Extending your repayment period (amortization) to lower your monthly payments up to the maximum allowable period;
•Adding any missed payments to your outstanding balance and spreading them out over the lifetime of your mortgage;
•Arranging special payments unique to your particular financial situation; or
•A combination of the above.

Clarify your financial picture by preparing a list of your income, financial obligations, savings and investments before meeting with your lender. This will help paint a more detailed picture of your financial situation, and make it easier to find a viable solution.

How Credit Score is Computed

2010-08-20T17:39:00.002-06:00

Ever wonder how that magical number "The Credit Score" – is computed?

If you are shopping for credit, you are probably hearing the term FICO or BEACON score. The FICO score was developed by Fair Isaac & Co., which began credit scoring in the late 1950s. The point of the score is consolidate your credit profile into a single number. The Beacon score is a brand name used by Equifax, the largest credit-reporting agency in Canada. While Fair, Isaac & Co. and the credit bureaus do not reveal how these scores are computed, whether you get a loan or not is a numbers game: The more points you score on your credit app, the better you do. (Source: Gail Vaz-Oxlade - Canada Finance)

Variable vs Fixed

2010-07-08T22:50:00.002-06:00

There is a lot to consider when deciding whether to go for a fixed or variable rate mortgage – especially, your tolerance of risk and your ability to sleep at night. Generally, fixed rate mortgages charge a higher rate and cost more, but payments are fixed for the term of the mortgage so you know what amount is coming off your principal. Variable rate deals, on the other hand, have generally cost less over the term of a mortgage but payments rise -- and fall -- with rate changes. In recent years, a number of lenders have begun offering mortgages that feature a fixed and variable combination.

For example, you have half your mortgage as a five-year fixed rate, and you could take a variable rate mortgage for the other half.

A number of brokers have seen increased interest in these umbrella products.
Combination or hybrid mortgages are growing in demand mostly because people are unsure where the market is going. For those who are not comfortable locking in the full amount and want to play with the prime rate, there are some great variable rates out there where you're paying 1.80%, which is phenomenal."

As well as being exposed to different interest rates, the amortization period for each segment can also be different.

As with all mortgages, it pays to ask questions and read the fine print.
"There are a lot of differences with mortgages, and you have to be very careful with the lender you choose. I will disclose upfront the differences and provide you with a better rate on either fixed or variable that suits your financial needs.
Overall, by doing the combination mortgage you will probably pay less over the life of a mortgage ... if a component of it is at the lower variable rate."

Fun ways to make Dad feel loved on Father’s Day.

2010-06-17T10:00:00.000-06:00

Sure, it’s easy to buy Dad another tie or golf shirt, but what he’d really like is some quality time with you. Here are some fun gift ideas—from free to moderately priced—that will bring the two of you together and create lasting memories.

Ongoing car wash certificate. Make a certificate that says you’ll drop by once a month to wash and vacuum his car. Be sure to make time for coffee and a visit on each occasion.

A walk down memory lane. Pick Dad up, drive him to the neighbourhood where you lived as a kid, and spend a few hours walking and talking. Point out where he taught you to ride a bike, coached your little league team, bought you ice cream, etc.
Movie night at his place. Gather up the family for a monthly or weekly movie night. You provide the popcorn, beverages and DVD (he gets to choose the movie).

A sunny afternoon at the game. Enjoy baseball, soccer, cricket, lawn bowling, whichever sport Dad likes best. And treat him to a hot dog or ice cream cone!

Ongoing outings with the family. Give Dad a family membership to an art gallery, museum, botanical garden or science centre, then get everyone together once a month for an afternoon of fun.

Pre-loaded digital picture frame. Gather up all your most meaningful photos of Dad and you, get the old ones scanned, then load them all onto a digital picture frame for his viewing pleasure.

Play his favorite game with him. Spend a fun afternoon playing golf, horseshoes, chess, basketball, crib, croquet, Scrabble, etc.

Take him on a mini road trip. Load up a CD or MP3 player with Dad’s favorite tunes, pick him up, then spend an afternoon driving to a destination of his choosing.

Your Credit Score: What it is and how to fix it.

2010-06-10T15:20:00.000-06:00

Your credit score is a three-digit number that lenders use to predict your creditworthiness. Credit reporting companies calculate your score based on your payment history, how much you owe, how long you’ve had credit and how often you apply for new credit. In general, the higher your score, the less likely you are to become delinquent on credit. If it’s above 650, you’ll probably qualify for a standard loan. If it’s lower, you may have trouble getting new credit.
Because your credit score and credit report are constantly changing, it’s important to review them on a regular basis, at least once a year. Since there are two main credit reporting companies in Canada—Equifax and TransUnion—it’s a good idea to check your records with both companies. This helps you identify and correct any inaccurate information, detect any fraudulent activity and gauge your overall credit health.
If you’re planning on applying for a mortgage, it’s especially important to check your report a few months in advance. If your credit score is under 650, your mortgage options will be reduced, and you’ll pay a premium on your loan -- perhaps as much as 2 to 3 percent more than borrowers with excellent credit. You may need to provide more documentation than those with higher scores, including a formal appraisal of your home’s value.
Still wondering what your credit score is and how to improve it? As an added value to our subscribers, we’ve put together a special Free Credit Repair Guide titled, “12 Simple No Cost Methods to Repair Your Credit.” To get your free copy of this informative guide, call us today at: 1-800-685-1029 ext. 300. Call now while supplies last!

Is tax season taxing your health?

2010-05-27T10:00:00.000-06:00

One study estimates that US taxpayers spend over 6 billion hours per year working on their taxes (in Canada, it may be as high as 600 million hours). And with all those hours comes a tremendous amount of stress and fear:
• You’re under a tight deadline.
• There’s a lot of money on the line.
• You have to track down countless receipts and slips.
• The forms are confusing.
• Getting it wrong—even by accident—can result in stiff penalties.
Putting yourself under such stress can have serious health consequences. Your regular eating habits may be disrupted so you’re more likely to reach for high-fat, high-sugar comfort foods. Worrying may lead to sleep deprivation, which can weaken your immune system and make you more prone to sickness and disease.

In fact, stress itself is known to suppress the immune system. Stress causes the body to release endorphins (opiates related to morphine), which relieve pain and produce feelings of euphoria. While morphine makes us feel better, research indicates that it also profoundly suppresses immune cell activity.

Isn’t it ironic that doing our taxes can actually increase our health care needs, which in turn increases the amount of tax we pay! If tax season stresses you out, next year consider paying someone else to do it.

10 spring cleaning tips

2010-05-20T09:51:00.000-06:00

1. Work from the top down, inside to outside, to avoid getting what you just cleaned dirty again.
2. Do one room, even one area of one room, at a time to avoid unfinished jobs. The satisfaction of seeing one room sparkle will make the hard work feel like it's worth the effort.
3. When tidying, reduce trips around the house by temporarily depositing items in one spot en route to but not at their final destination.
4. Do two things at once. While laundry is going, scrub the shower stall.
5. Make small repairs. If you're not handy, hire someone.
6. Invest in good rubber or vinyl gloves to protect your skin and nails.
Dust before vacuuming or cleaning the floor. Try feather or lamb swool dusters, especially extendable ones for reaching above window and door casings and into corners. Household rags are invaluable for jobs requiring a damp cloth – natural fibres work best.
7. Buy mops with a squeeze mechanism (great for vinyl, linoleum or ceramic tile floors) and a decent-size heavy-duty pail – one with a measuring scale helps get soap-to-water ratios correct.
8. Don't stand your brooms on their bristles. It will destroy their shape and diminish their effectiveness. Instead, get a broom holder, like the Magic Holder 5-position broom organizer.
9. Use a Swiffer for light dusting, or your favourite broom or vacuum attachment to clean hardwood floors. Then damp-mop with a mild cleaner such as Murphy Oil Soap. I recently discovered BonaKemi's MicroPlus Hardwood Floor Care System, which includes a mop with a removable washable microfibre pad and a nontoxic water-based spray cleaner. It makes the floors glow, and smell good, too. (Source:hgtv.ca)

Strategic ways to use your tax refund.

2010-05-13T10:00:00.000-06:00

There are two ways you can look at your tax refund. As “mad money” to blow on indulgences like the latest summer fashions, a must-have gadget or a splashy night on the town. But remember, it’s called “mad money” because you’d have to be mad to spend your hard-earned dollars on stuff that immediately loses value. Instead, look at your tax refund as a way to help generate wealth, so you can eventually achieve financial security:

• Renovate for resale value. By upgrading your kitchen or bathroom, you can add value to your home.
• Consider a revenue property. Start putting money away for a down payment while you research the market. By choosing the right property, the revenue will cover your mortgage payments and you’ll end up with substantial equity—which you can use to invest in a second property!
• Invest in commodities. As the world economy recovers, demand for commodities like oil and metals is going to grow. Buy stocks, mutual funds or the metals themselves and participate in that growth.
• Invest in yourself. Take a course or attend a conference that will help advance your career and increase your earning power.
• Make a charitable donation. Not only will you be helping a worthy cause, you’ll generate an even bigger tax refund next year.

New mortgage rules impact real estate investors and self-employed buyers.

2010-05-06T08:50:00.001-06:00

For months now we’ve known that the federal government was planning to tighten mortgage rules in April. Buyers now have to qualify for a five-year posted fixed rate when they choose a 1 – 4 year term or variable rate. And people who are refinancing can only withdraw up to 90% of the value of their home instead of 95%. But now CMHC (Canada Mortgage and housing Corporation) has also announced tighter rules for real estate investors and self-employed borrowers. In raising the down payment for 1-4 unit rental properties (non-owner occupied) from 5% to 20%, the rules for rental offsets have also been changed. Now the rental offsets have made it much more difficult to qualify for a mortgage on a rental property.

New rules also affect self-employed borrowers with more than three years in the same business and commissioned-income borrowers. They now have to provide financial statements, T1 Generals, Notice of Assessments, T4s, etc. to qualify for CMHC’s Self-Employed Product. Also they can only qualify to 80% of the value of the home. However, there are other Default Insurers who will consider 90% of the value of the home.

As your local mortgage specialist, I recommend that you start shopping for your next mortgage well in advance. By analyzing your situation, I can show you a wide range of still-affordable options, including alternate mortgage insurers who offer less stringent rules in some cases. Please call me today for a free mortgage analysis.

Housing Activity Stronger in 2010

2010-04-29T10:00:00.000-06:00

OTTAWA, March 2, 2010 — Housing starts rebounded in the second half of 2009 and will strengthen in 2010, according to Canada Mortgage and Housing Corporation’s first quarter Housing Market Outlook, Canada Edition*.
Following a total of 149,081 units in 2009, housing starts are expected to be in the range of 152,000 to 189,300 units in 2010, with a point forecast of 171,250 units. In 2011, housing starts will be in the range of 156,400 to 205,600 units, with a point forecast of 175,150 units.
“Canadian housing markets will benefit from improving economic conditions and low mortgage rates,” said Bob Dugan, Chief Economist for CMHC. “As well, measures recently announced by the Government of Canada to support the long-term stability of Canada's housing market will help moderate housing activity as some potential buyers will have to save a larger down payment or consider a less expensive home.”
Mr. Dugan also noted that the existing home market has shifted from a buyer’s market, at the beginning of 2009, to a seller’s market. The relative lack of new listings for existing homes has pushed some of the demand into the new home market, which helps explain the forecast for higher housing starts activity in 2010.
The strong pace of MLS® sales seen in the second to fourth quarters of 2009 reflects, in part, activity that was delayed in the previous two quarters. The pace is not likely to be sustained as pent-up demand is exhausted and financing costs increase with anticipated higher interest rates later in 2010. As a result, existing home sales will be in the range of 455,350 to 509,900 units in 2010, with a point forecast of 486,700 units, and then move slightly lower in 2011 to be in the range of 426,300 to 494,600 units, with a point forecast of 469,950 units.
With an improved balance between demand and supply, the average MLS® price is expected to remain close to the average in the last quarter of 2009, for most of 2010, and then rise modestly in 2011.
As Canada's national housing agency, CMHC draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making vital decisions.
* The forecasts included in the Housing Market Outlook are based on information available as of February 16, 2010. Where applicable, forecast ranges are also presented in order to reflect economic uncertainty.

How to Cushion Yourself Against Rate Hikes

2010-04-26T10:28:00.002-06:00

The prospect of higher mortgage rates and stiffer rules that went into effect last week on qualifying for house mortgages have left Canadians scrambling for answers to their home financing questions before rates rise.

Many Canadians already faced with growing consumer debt are worried about how they'll continue to make payments once mortgage rates rise. And many others, who want to get into the market ahead of rate hikes wonder how or if they'll be able to do so. And as the reality of higher rates creeps closer, mortgage holders have many questions.

The answers are different for each homeowner or prospective homebuyer; but there are some general rules that wise mortgage holders follow in order to cushion themselves against rate hikes.

Those with mortgages coming up for renewal in the next four months and buyers looking to get into the market before rates rise should get pre-approved at current rates, giving them 120 days to lock in. Refinancing is also an option for those worried about existing mortgages, but owners would have to pay a penalty.

If you think that rates are going to go up three points in the next two years and you have a year or two left on your mortgage, to pay a small penalty for the peace of mind for the next five years might be worth it.

If you are going to be worried about what happens with rates, don’t choose a variable rate. Nervous buyers should consider a fixed-rate mortgage for a longer period of time and take comfort in knowing the payment will not change for the term of the mortgage. Taking a five year rate at 4.5% is still an incredible rate.

Instead of buying a dream home, consumers may be buying a starter home like most people used to have to do. Homebuyers worried about their ability to make payments may have to compromise. You might have to settle for a little less house initially in order to start building up equity, or you might want to consider having a cushion in your payments.

Protect yourself from financial storms.

2010-04-22T10:00:00.000-06:00

In finances—as in all things in life—it’s not what happens that matters, it’s how you react to what happens. While millions of people suffered during the current economic crisis, many people did just fine because they reacted differently.

The key is to prepare for the worst even when times are good. This can be difficult, especially during boom years like the ones leading up to the current crisis. It’s tough to keep your debt under control and slowly build assets when everyone else is chasing get-rich-quick schemes. But the people who took the slow, responsible route are now benefiting. Here are some tips:
• Be an entrepreneur, not an employee. Start your own small business on the side. Expand on the ideas that work. Eventually, you’ll earn more money, pay less tax, and never be afraid of losing your job.
• Invest for cash flow, not capital gains. Capital gains are what you get from the stock market or the value of your house, and as we know they can drop. Cash flow is an ongoing revenue stream, like the money you earn from a revenue property. Even during bad times, people need places to live, so your cash flow continues.
• Invest for inflation. Having all your assets in cash leaves you at the mercy of inflation. Instead, invest in things that go up in value as inflation rises, like silver and other commodities.

Commonly Used Financial Terms and their Definitions.

2010-04-21T12:24:00.002-06:00

There are many financial terms that are commonly used in daily discussions, however if we had to define some of them we might be stumped. Here are a few simple definitions:

Basis Point
One-hundredth of a percentage point. For example, the difference between 5.25% and 5.50% is 25 basis points.

Bear Market
A market in which stock prices are falling. The rule of thumb seems to be at least 20 percent. However, a lot depends on how long the drop lasts. The quicker the rebound, the less likely that investor psychology will turn from optimism to the pessimism that usually accompanies a bear market.

Bull Market
A market in which stock prices are rising for a length of time. Prices need not rise continuously. There can be days, weeks and even months in which prices fall. What matters is the long-term trend. When it comes to people, bullish describes one who is optimistic.

Dow Jones Industrial Average (DJIA)
There are thousands of investment indexes around the world for stocks, bonds, currencies and commodities however the DJIA is one of the best known and most widely quoted stock market averages in the media. It contains an average made up of 30 actively traded blue chip stocks spanning many different industries that trade on the New York Stock Exchange. The Dow, as it is called, is a barometer of how shares of the largest U.S. companies are performing.. The DJIA is calculated by adding the prices of each of the 30 stocks and dividing by a divisor. The average is quoted in points rather than dollars. It is price weighted, meaning that a $2 change in a $100 per share stock will have a greater affect than a $2 change in a $20 per share stock.
Gross Domestic ProductGDP is the value of all goods and services produced in Canada in a calendar year. The gross domestic product includes only final goods and services, not goods and services used to make another product. Changes in the gross domestic product are an indication of economic output.

Income Trust
Trusts structured to own debt and equity of an underlying entity, which carries on an active business, or has royalty revenues generated by the assets of an active business. By owning securities or assets of an underlying business, an income trust is structured to distribute cash flows, typically on a monthly basis, from those businesses to unit holders in a tax-efficient manner. The trust structure is typically utilized by mature, stable, sustainable, cash-generating businesses that require a limited amount of maintenance capital expenditures. An income trust is an exchange-traded equity investment that is similar to a common share.

Index or stock price index
A statistical measure of the state of the stock market, based on the performance of stocks. Examples include the S&P/TSX Composite Index.

Recession
Two consecutive quarters of contraction in the gross domestic product.

TSX Composite Index
Comprises the majority of market capitalization for Canadian-based, Toronto Stock Exchange listed companies. It is the leading benchmark used to measure the price performance of the broad, Canadian, senior equity market. It was formerly known as the TSE 300 Composite Index

Nip your allergies in the bud this spring.

2010-04-15T10:00:00.000-06:00

As anyone who suffers from allergies knows, springtime can leave you with scratchy or watery eyes, sneezing, coughing, a runny nose, hives and more. Since diet and lifestyle factors are the main causes of allergies, it’s a good idea to get yourself tested for sensitivity by a medical professional. But even without a formal test, there are lots of steps you can take to prevent many common allergies:
• Avoid known allergens like wheat, dairy, refined sugars, and foods high in saturated and hydrogenated fats. Eat more fresh, organic fruits and vegetables, rich essential fatty acids, and low-fat, non-dairy animal protein.
• Drink 8-12 glasses of purified water each day.
• To help detoxify your body, consider doing a juice fast of organic vegetable juices.
• Try herbal remedies like yarrow and myrrh to help reduce mucus; or Echinacea, astragalus root and goldenseal root to strengthen the immune system.
• For digestive issues, try digestive enzymes, probiotics, zinc, vitamin A, vitamin C, vitamin P and other bioflavonoids.
• Try chamomile or lavender aromatherapy to relieve reactions and stress.
• Wash all bedding at least once a month. Remove synthetic carpets and commercial stuffed animals. Keep all windows closed during peak allergy seasons and don’t allow smoking. Try using ozone air purifiers to reduce airborne allergens.

New credit card rules help, but the best advice is to wean yourself off credit card debt.

2010-04-08T10:00:00.000-06:00

On January 1st, the Canadian government implemented new credit card regulations, which it says increase transparency and protect consumers. Here are some of the new regulations now in place:
• Credit contracts and application forms must have a "summary box" that clearly explains interest rates, fees, and how long it would take to fully repay a balance if only minimum monthly payments are made.
• Banks must give advance disclosure of interest rate increases, even if this information is already in the credit contract.
• You must give your consent before your credit limit can be increased.
• If you transfer your balance to a lower-interest card, your payments now have to be allocated in your favour.
• There’s now a limit on certain debt collection practices used by financial institutions.
• Banks can’t charge over-the-limit fees resulting from holds placed by merchants.
• One of the most significant changes has been delayed until September 1st. As of that date, you’ll have a minimum 21-day interest-free grace period on all new purchases if you pay your outstanding balance in full by the due date.

Critics of the new rules say they don’t go far enough. However, at least the government is trying to make an effort to help consumers avoid predatory lending practices. And that’s a good thing.

However, an even better strategy is to start weaning yourself off of credit card debt. Unlike taking out a mortgage to buy a home or revenue property, buying stuff with your credit card at high interest rates doesn’t yield any returns—it simply gets you deeper in debt. Instead of making the minimum monthly payment, put yourself on a budget, take a part-time job (or start a home business) and eventually get your credit cards paid off. You’ll be astonished how much extra money you’ll have to invest in assets that actually appreciate in value and put cash in your pocket!

Burning fat by building muscle.

2010-03-25T10:00:00.000-06:00

If you’ve been trying to decide which to do first—burn off fat or build up muscle—here’s some good news. You can do both at the same time! All it takes is a commitment to eating better and exercising more. Here are the steps to a healthier, lighter, stronger you.

• Eating better. Eat smaller meals more often. Eat about every three waking hours and never skip a meal. Make sure you’re getting 15-20 grams of protein per meal from unprocessed, preferably organic, natural sources. Avoid processed carbohydrates, like refined flours and sugar. Instead, choose fresh organic vegetables, fruits and berries. Drink plenty of pure filtered water.

• Weight training. Do a 45 minute whole body workout every other day, including squats, dead lifts, presses, rows, dips and chins. Remember, too little is ineffective, but too much is counter-productive. You need the days off to give your body time to rest and grow. Also, make sure you get plenty of sleep.

• Cardio exercise. Start with a mild cardio exercise you enjoy—like walking—and do it five or six days a week. Slowly build up to a brisk pace and then slowly increase your distance. To maintain your present weight, walk about 2 miles (3.2 km) a day. To lose weight, walk 3-6 miles (5-10 km) a day. Remember, you can spread this distance out throughout the day.

Why it pays to buy, sell or refinance before April 19th.

2010-03-18T10:00:00.001-06:00

As we reported last month, the federal government was thinking about cooling down Canada’s overheated housing market by making it more difficult for Canadians to qualify for a mortgage. In February, the Minister of Finance introduced some new rules to do just that. Starting April 19th, if you apply for an insured mortgage, here’s how you’ll be affected:

• To qualify for a mortgage, you’ll have to meet the standards for a five-year fixed rate mortgage even if you choose a shorter term or variable rate (currently, you have to meet the three-year standards). Lower rates and shorter terms will still be available, but they’ll be harder to qualify for.
• If you’re planning to refinance to access extra funds, you’ll only be able to withdraw up to 90% of the value of your home (currently, you can withdraw up to 95%).

• If you’re thinking of buying a revenue property, the minimum down payment will rise to 20% for non-owner-occupied properties (it’s currently 5%).
Obviously, if you’re thinking of buying, refinancing or investing in a revenue property, now’s the time to do it, while mortgages are still easier to qualify for. Even if you’re thinking of selling, you may want to act now since prices are expected to drop after April 19th. For more details on the new rules and a free analysis of how they might affect you, please call me today.

Spring’s the time to prepare your garden for summer beauty.

2010-03-15T09:42:00.003-06:00

As the days lengthen and temperatures rise, it’s hard to resist getting out into the garden. Here are some simple things you can do now to promote a healthy garden year-round:

• Once the lawn is no longer waterlogged, rake to remove dead grass, leaves and winter debris. You may also want to aerate to encourage stronger growth. If you find dead or bare patches, clear off the debris, loosen the surface with a rake, re-seed and keep well-watered until it germinates.
• Once temperatures are reliably warm, remove winter mulch from perennials and shrubs, and cut back any dead foliage.
• Now’s the time to transplant any shrubs or perennials you’ve been planning to move. They always transplant better before they begin to leaf out.
• Pull weeds now while their roots are still shallow.
• Spring’s a good time to prune roses and some fruit trees and vines, as long as their leaves haven’t formed yet.
• Don’t dig in the soil while it’s still soggy or you may damage your soil’s structure. When it’s loose enough to fall apart in your hand, you can start working in compost or manure.
• Since grass grows vigorously in early spring, edge your garden to create a narrow trench between lawn and soil.

Seven inexpensive facelifts that can make your home more marketable.

2010-03-05T10:15:00.001-07:00

If you’re thinking of selling this spring—or any time during the next twelve months—here are some fast, easy and affordable ways to attract more offers and get a higher price.
1. Give your entrance a sense of occasion. Replace the standard knob on your front door with a substantial piece of hardware that lets visitors know this is a home of significance.
2. Spruce up your carpeting. If your carpets are in neutral colours and good condition, simply have them professionally cleaned. If they’re showing their age, distract the eyes of buyers with tasteful yet inexpensive area rugs.

3. Add drama with light. Living rooms and dining rooms can gain instant elegance by replacing lifeless light fixtures with a contemporary chandelier or ceiling fan. Shop around and you’ll find that some very expensive-looking fixtures are actually quite affordable.

4. Make sure your kitchen is bright and up to date. Replace the sink fixtures and cabinet door handles. Install brighter, energy-efficient light fixtures. Help your appliances look newer and more color-coordinated by ordering new face panels. If you have a little extra money, replace your cabinet doors and your kitchen will look brand new!

5. Transform your bathroom. Replace the toilet seat. Remove the old sink cabinet and install a pedestal sink for a spacious, contemporary look. Install vinyl floor tiles right over the old flooring. Re-grout the tile around the tub and shower. If you have the budget, get a prefabricated tub and shower surround installed.

6. Maximize limited storage space. Install a wire shelf and basket system in entry closets, pantries and bedroom closets for an efficient new look.

7. Convert your den into a bedroom. If the room’s big enough, all it takes is a closet, which doesn’t cost a lot to have built in. Remember, adding an extra bedroom adds to resale value!

Mortgage Insurance Rule Announcement

2010-02-18T17:06:00.001-07:00

This morning, Federal Finance Minister Jim Flaherty announced prudent changes to mortgage insurance rules intended to come into force on April 19, 2010. They are as follows:

1. All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term;

2. The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one's home;

3. Non-owner occupied properties will require a minimum down payment of 20%.

There were no changes to down payment requirements or length of amortizations for owner-occupied residences.

Warning: Ottawa may be planning to make it harder for you to get a mortgage.

2010-02-18T15:49:00.000-07:00

Thanks to historically low interest rates and a recovering economy, Canadians are buying homes at a record pace. Of course, this is great news for the housing industry and overall economy, but the federal government is sending signals that it would like Canadians to proceed with caution.

The Bank of Canada has already announced that it will likely start raising interest rates by mid 2010. Within a couple of years, mortgage rates could be as much as one or two percentage points higher. What worries the government is that some of today’s home buyers are taking on mortgages they can just barely afford, and when rates start rising, payments may be unmanageable.

To encourage buyers not to get in over their heads, the government is hinting that it may take steps to cool down the housing market, if necessary. Possible actions being discussed include increasing the size of the down payment (currently at 5%) and/or reducing the maximum allowed amortization (currently at 35 years). Both of these steps could potentially cut many homebuyers out of the market. I can help you make sure you will NOT have payments that may be unmanageable.

If you’re considering buying in the next year, you may want to act sooner rather than later. Buying now means taking advantage of record low interest rates, a manageable down payment and a more flexible amortization. If you wait too long, all of these advantages may be lost and home ownership could suddenly be out of reach.

As your mortgage advisor, I’d be happy to sit down with you, explain the situation, analyze your needs and present you with an affordable plan, whether you’re buying for the first time, renewing or refinancing. Please talk to me today before Ottawa closes the door!